NFTs: Art or fraud?
Although lauded for its financial potential, the token is not without its caveats
January 12, 2022
Ethereum is the future, reads a message in Sharpie on the wall outside the art building. But what exactly does Ethereum do?
A host of non-fungible tokens, more commonly known as NFTs, Ethereum is the second largest cryptocurrency platform in terms of market capitalization. A NFT is a unit of data similar to the cryptocurrency, Bitcoin. Stored on a blockchain, a system for recording transactions made in cryptocurrency, NFT has the property of being non-fungible, rendering the data unique.
Commonly connected to art and other forms of intellectual property, NFTs are popular for their lucrative payments for art and other forms of artistic intellectual properties including animations. The method represents an option of purchasing unique work, not dissimilar to paying for intellectual property rights or copyrights for a piece.
NFT artists believe that the financial potential of the token is the next evolution of art.
“It’s a[n] investment for the future,” independent NFT artist Brendon Whites said. “I think we all saw how unreliable the economy gets with the pandemic. The artist community can go away at any moment, and this is an investment for financial stability and reliability and fair compensation. The more people who are curious about NFTs, the stronger and better the community is.”
People bought a NFT for a bunch of money and get a bunch of income without being taxed. They only made it a taxable thing around last week.”
— Senior Esther Lan
The trend is rapidly expanding, with large scale platforms and applications such as Reddit, Adobe Photoshop, and Discord mentioning plans to implement NFT options via integration of cryptocurrency wallets into their software.
“I can sell a drawing for thousands the amount a drawing might have or will have if I did it through a commissions process from a potential buyer,” Whites said. “I can control my own worth, and it’s just a place where all these like minded people can get together to control his or her own income through these big apps and websites. It’s great that this is the future of crypto.”
Whites plans on releasing his own collection via collaboration with larger artists in the near future.
“I’ve worked hard on it, and I feel like I’ve put in the effort to improve myself and my mindset.” Whites said. “NFTs are the next evolution of art, and crypto is growing like crazy. People are buying and creating, and it’s just a super strong cycle that is the future.”
Critics say that NFTs, despite their lucrative promises, open the doorway for money laundering.
“It’s like rich people buying bad artwork, you know?” Lan said. “People bought a NFT for a bunch of money and get a bunch of income without being taxed. They only made it a taxable thing around last week.”
US president Joe Biden’s recent $1 trillion infrastructure bill has a new application of 6050i, a part of the federal tax code that now applies to crypto assets. The transfer of digital assets above $10,000 in value will be treated like money, and failure to report the digital assets will now be considered a felony offense.
“Governments are aware of crypto and it’s a legitimized asset now,” said Whites. “The internet is the future of money, and trading just comes along with it. It’s freedom of expression that drives the economy.”
Critics also believe that NFTs represent unreliability rather than stability.
“Well, I think NFTs capitalize on art, and it’s going to lose its original meaning of being something everyone can connect to and feel,” said senior Esther Lan. “NFTs don’t really qualify as pieces of art, rather they’re like stocks and something to make money off of.”